IOTALedger of Things
Internet of Things“50 billion connected devices in 2020” -Cisco
Intro-Video
Smart Centralization
Cloud EVERYTHING
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Potential problems of IoT
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Single Source of Failure
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Censorship
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Smart Devices, Dumb Network
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Data Transfer
Money Transfer 9
Blockchain
“Why the Blockchain Is the Biggest Thing Since the Internet” -NASDAQ
Distributed Ledgers
● Every party has an individual copy
● Prone to tampering
● High cost to compare datasets
● No way of verifying the original dataset
Traditional Ledgers
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● Datasets shared amongst all parties
● Every party can verify the datasets of other participants in the network
● Tampered datasets are excluded
● An immutable single source of truth is established
Distributed Ledger
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Single Source of Truth
Shared Truth
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Illustration from Bitwage.com
+ = ?14
Blockchain’s Limitations
● Scalability
● Storage
● Bandwidth
● Fees
● No Data Privacy
● Expensive Data Storage
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I o T Requirements
● Low Resource Consumption
● Widespread interoperability
● Billions of nano-transactions
● Data Integrity
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The solutionRethink from scratch
A revolutionary new distributed ledger designed for Machine-to-Machineinteractions.
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Blockchain without the Blocksand the Chain. What???
Tangle
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● Limited to Block Size and Time
● Not scalable● Transaction Censorship (fee
thresholds)● Centralization● Consensus Decoupled● 80% of miners from China● ...
“Include my transaction, here is my fee”
Blockchain’s Limitations
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Tangle
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Tangle● Bundles all transactions in a Directed Acyclic
Graph (DAG)● Completely self-regulating, consensus no longer
decoupled● Very Scalable. Low overhead Proof-of-Work to
prevent spam
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● No Fees
● Scalable
● Quantum Proof
● Modular
● Lightweight
● Offline 22
$0.01- $0.01 + $0.01
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Data Integrity
● Data is tamper-proof
● Enables automatic processes
● Remove humans from the equation
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Scale
Usability
Blockchain
IOTA Tangle
Scalability
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Go Offline
Offline Tangle Cluster
Main Tangle
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If this then that
Smart Contracts
Turing Completeness
SecurityVery CheapScalableLow Entry Barrier (based on SQL) 27
OUR VISION28
Economy of Things
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Sharing Economy 2.0Anything with a chip in it can be leased Devices trade resources among each other
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No longer bound to machines hardware!
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Cloud, Fog and Mist
EDG
EC
OR
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● Real Time Processing
● Avoid network congestion and signal collisions
● Incentive for interoperability
● Data Integrity
Requirements
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CURRENT STAGE
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Protocol and Network Statistics
◉ Official launch July 11th
◉ 1 year of development
and testing
◉ Community of 1000+
◉ More than 2m transactions
◉ $60m+ of value transferred
◉ More transactions per
second than any blockchain
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(Unofficial slide)◉ Tech problems with auto-discovery/slow syncing
and double-spending wallets◉ Network currently down◉ Community Management◉ Funding of Foundation and Big Deal◉ Anniversary update, Release 1.1, +1 Dev,
+1Bussines, Phase 2 (utility), Exchanges
IOTA Foundation
We are an open-source, non-profit Software Foundation. Goal of the Foundation is it to establish IOTA as a standard in the IoT stack.
Foundation members
David Sønstebø Dominik Schiener Sergey Ivancheglo Serguei Popov
USE CASES
Bandwidth on demand
Supply Chain VisibilityBanks
Insurance Providers
Customs
Importers/Exporters
Shipping Liners
Logistic Companies
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< / >
Smart-Grid
Other Use Cases
● Sensor Data selling & Data Marketplace
● On-demand API access
● Data Integrity (insurance, banking, etc.)
and now...End of IOTA Foundation
presentation
...The Tanglein more details
Skipping over the whitepaper
Basics● DAG Basic Examples (trees, direct, indirect, confirmation)● Approvment DAG (IOTA) vs Transaction DAG (BTC)● Main Idea: Issuing a Tx needs PoW (Approving other Tx)● Approving means
Signature verification & Check for double spendings
● But which Tx to approve???
A bit of terminology● Genesis & Tips● (own) weight (∝ amount of PoW)● cumulative weight ● Score
Tip Selection Algorithm● Only guideline for network, no rule● Simple strategy: Choose two random tips
● Does not encourage approving tips by lazy nodes● Because probability that their tips will get approved is equal to
the one of the tips that did real PoW● Solution: Bias towards end (i.e. tips with high score)
Tip Selection Algorithm● Simple strategy 2: Choose two tips out of the 10% with the
highest scores● Problem: Vulnerable against double-spending “large weight”-
attack will eventually always succeed
Tip Selection Algorithm● Mitigation strategy: Cap Max weight of transaction
● This drastically decreases probability of attacker● But he can still beat us by pre-building a parasite-chain
A parasite● Main tangle tip score ≈ Sum of main tangle weights● Parasite tangle tip score ≈ Sum of main tangle and parasite
chain weights● Parasite chain can be build without broadcasting
● Idea: main tangle should have more active hashing power
● which is ∝ cum weight
The Final Tip Selection Algorithm● How do we figure out which tip is on the main tangle?● We place some „particles“ deep in the tangle● And let them walk towards the tips● With affinity to high cumulative weights (MCMC)
● This will very unlikely select lazy tips● and very unlikely parasite chain tips
Double Spending● Conflicting Tx can exist in the Tangle● Network has to decide which Tx (SubTangle) will not get
orphaned● Methodology: Run tip selection Algorithm many times and
see how often the conflicting Tx are (indirectly) approved by the tips
● Result: Transactions in the subTangle with less hashing power will eventually get orphaned
Interesting Details● All addresses can only get used once● Spamming the network actually helps it● Coordinator helps network until enough nodes are online● Tx actually have a particular structure (bundles)